U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[x]          QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended: March 31, 1997

[ ]          TRANSITION REPORT PURSUANT SECTION 13 OF 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         For the transition period from _____________ to ____________

                         Commission file number 0-17232

                           CAPITAL RESERVE CORPORATION
        (Exact name of small business issuer as specified in its charter)

         COLORADO                                            84-0888594
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                          Identification No.)

           7860 EAST BERRY PLACE, SUITE 215, ENGLEWOOD, COLORADO 80111
                    (Address of principal executive offices)

                                  (303)220-5030
                           (Issuer's telephone number)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements  for the past 90 days.  Yes _X_ No
___

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the last practicable date:

           546,045 SHARES OF CLASS A COMMON STOCK, NO PAR VALUE, AS OF
                                 MARCH 31, 1997

   Transitional Small Business Disclosure Format (check one); Yes____ No __X__
Exhibit index on page 8                                       Page 1 of 12 pages

                                                              

<PAGE>




                 [Letterhead of John M. Hanson & Company, P.C.]









Board of Directors
Capital Reserve Corporation

                         INDEPENDENT ACCOUNTANTS' REPORT

         The  accompanying   consolidated   balance  sheet  of  Capital  Reserve
Corporation  as of March 31, 1997,  and the related  consolidated  statements of
operations  and cash flows for the three  months  ended  March 31, 1997 and 1996
were not audited by us, and, accordingly, we do not express an opinion on them.

         Consistent  with the  requirements  of Item  310(b) of  Regulation  S-B
management has elected to omit substantially all of the disclosures  required by
generally  accepted  accounting  principles.  If the  omitted  disclosures  were
included  in  the  financial   statements,   they  might  influence  the  user's
conclusions about the Company's financial position,  results of operations,  and
its cash flows.  Accordingly,  these  financial  statements are not designed for
those who are not informed about such matters.


                                          /s/John M. Hanson & Company, P.C.












Denver, Colorado

April 24, 1997


                                                              2

<PAGE>

<TABLE>


                           CAPITAL RESERVE CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1997
                                   (Unaudited)

-------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                     ASSETS
<S>                                                                                                    <C>
CURRENT ASSETS
  Cash and cash equivalents                                                                            $104,890
  Accounts receivable                                                                                     1,851
  Marketable securities                                                                                  88,162
  Other current assets                                                                                    2,829
-------------------------------------------------------------------------------------------------------------------


      Total current assets                                                                              197,732

EQUIPMENT
  Furniture and equipment                                                                                34,901
  Automobiles                                                                                            60,242
-------------------------------------------------------------------------------------------------------------------


      Total equipment                                                                                    95,143

      Less accumulated depreciation                                                                     (37,231)
-------------------------------------------------------------------------------------------------------------------


      Net equipment                                                                                      57,912

OTHER ASSETS                                                                                             33,918
-------------------------------------------------------------------------------------------------------------------


Total assets                                                                                           $289,562

<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                                                  <C>
CURRENT LIABILITIES
  Accounts payable and accrued liabilities                                                             $141,032
-------------------------------------------------------------------------------------------------------------------


      Total current liabilities                                                                         141,032

STOCKHOLDERS' EQUITY
  Class A common stock                                                                                3,138,102
  Class B preferred stock                                                                                50,000
  Accumulated deficit                                                                                (3,039,572)
-------------------------------------------------------------------------------------------------------------------


      Total stockholders' equity                                                                        148,530
-------------------------------------------------------------------------------------------------------------------


Total liabilities and stockholders' equity                                                             $289,562

</TABLE>
                             See accountants' report

                                        3

<PAGE>

<TABLE>

                           CAPITAL RESERVE CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

-------------------------------------------------------------------------------------------------------------------

<CAPTION>
Three Months Ended March 31,                                                        1997                   1996
-------------------------------------------------------------------------------------------------------------------

<S>                                                                           <C>                   <C>
Revenue
  Consulting revenue                                                           $   2,500            $         -
  Insurance residuals                                                              4,036                  4,746
  Interest and dividends                                                           1,247                  3,086
  Investment gains                                                                79,856                  7,484
  Other                                                                            9,950                    579
-------------------------------------------------------------------------------------------------------------------


      Total revenues                                                              97,589                 15,895

Expenses
  General and administrative                                                     124,776                 96,160
-------------------------------------------------------------------------------------------------------------------


      Net loss from continuing operations                                        (27,187)               (80,265)

Loss from discontinued rental operations                                               -                   (300)
-------------------------------------------------------------------------------------------------------------------


Net loss                                                                        $(27,187)              $(80,565)



Continuing operations                                                         $     (.05)            $     (.14)
Discontinued operations                                                                -                      -
-------------------------------------------------------------------------------------------------------------------


Net (loss) per common share                                                   $     (.05)            $     (.14)


</TABLE>











                             See accountants' report


                                        4

<PAGE>


<TABLE>

                           CAPITAL RESERVE CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   Unaudited)

-------------------------------------------------------------------------------------------------------------------

<CAPTION>
Three Months Ended March 31,                                                        1997                   1996
-------------------------------------------------------------------------------------------------------------------

<S>                                                                             <C>                    <C>
Operating activities:
  Net loss                                                                      $(27,187)              $(80,565)

  Reconciling adjustments:
    Depreciation                                                                   2,636                  6,458
    Gains on investments                                                         (79,856)                (7,484)
    Partnership income                                                            (9,144)                     -

    Changes in operating assets and liabilities:
      Other assets                                                                 3,848                  6,014
      Accounts payable and accrued liabilities                                  (104,858)                (9,066)
-------------------------------------------------------------------------------------------------------------------


       Total adjustments                                                        (187,374)                (4,078)
-------------------------------------------------------------------------------------------------------------------


      Net cash (used for) operating activities                                  (214,561)               (84,643)

Investing activities:
  Proceeds from sale of common stock                                             136,859                 22,895
  Investment in common stock                                                     (38,674)                (7,362)
  Purchase of furniture and equipment                                             (8,109)                     -
  Purchase of rental property and equipment                                            -                 (8,909)
-------------------------------------------------------------------------------------------------------------------


      Net cash provided by investing activities                                   90,076                  6,624
-------------------------------------------------------------------------------------------------------------------


Change in cash and cash equivalents                                             (124,485)               (78,019)

Cash and cash equivalents at beginning of period                                 229,375                346,304
-------------------------------------------------------------------------------------------------------------------


Cash and cash equivalents at end of period                                      $104,890               $268,285

</TABLE>






                             See accountants' report

                                        5

<PAGE>




                           CAPITAL RESERVE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1997

                                   (Unaudited)

--------------------------------------------------------------------------------


NOTE A - MANAGEMENT'S STATEMENT

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain all  adjustments  (all of which are normal and  recurring in
nature)  necessary to present fairly the financial  position of Capital  Reserve
Corporation  as of March 31, 1997,  and the results of operations and cash flows
for the quarters  ended March 31, 1997 and 1996.  The Notes to the  Consolidated
Financial  Statements  which are  contained  in the Form 10-K  should be read in
conjunction with these consolidated financial statements.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (ITEM 303)

LIQUIDITY AND CAPITAL RESOURCES

Working  capital at March 31,  1997,  was  $56,700,  as compared to $162,001 and
$99,254 at March 31,  1996,  and  December  31,  1996,  respectively.  Since the
Company has no significant  source of revenue,  working capital will continue to
be depleted by operating expenses.  Furthermore,  if the Company should generate
an operating  loss for the current year  comparable to the loss incurred for the
year ended December 31, 1996, a substantial  portion of the Company's  remaining
cash and working capital will be depleted.

Current  liabilities were $141,032 at March 31, 1997 as compared to $222,333 and
$245,890 at March 31, 1996, and December 31, 1996,  respectively.  The change in
current  liabilities  is  primarily  due to the  payment of a note  payable to a
shareholder,  expenses  incurred with the  settlement  of a lawsuit  regarding a
former  subsidiary of the Company and the  indemnification  expenses  associated
therewith.

RESULTS OF OPERATIONS

Due to the sale of the  Company's  rental  real  estate,  the  Company no longer
receives  rental  revenues.  Rental  operations  are  reflected as  discontinued
operations  in the statement of  operations.  While the Company has continued to
receive  income (and losses) from Insurance  residuals,  Interest and dividends,
and Investments,  these items are not a significant source of income compared to
the Company's operating expenses.

The Company had total revenues of $97,589 and $15,895 for the three months ended
March 31, 1997 and 1996,  respectively.  As the result of the sale of marketable
securities,  for the three  months ended March 31,  1997,  the Company  recorded
Investment  Gains of $79,856,  as compared to $7,484 for the same period  during
1996.  The Company also  experienced  a $9,371  increase in Other  income.  This
increase was largely due to the  recognition of $9,144 received during 1996 from
the Company's 2.25% interest in Andrews Partners I, Ltd. ("Andrews"), a Colorado
limited partnership, engaged in real estate transactions.

General and  administrative  expenses for the three months ended March 31, 1997,
include legal expenses of $56,412 which have been incurred in connection  with a
lawsuit  regarding a former  subsidiary  of the Company  initiated in September,
1995, which was dismissed on April 10, 1997.


                                        6

<PAGE>



General and  administrative  expenses for the three months ended March 31, 1997,
also  include  salaries of $34,875,  employee  benefits  expense of $5,085,  and
related   payroll  tax  expenses  of  $3,111.   Also  included  in  general  and
administrative  expenses  for  the  three  months  ended  March  31,  1997,  are
Accounting and auditing  expenses of $9,805 and  Entertainment  and  Development
expenses of $3,231.

As compared to the three months ended March 31, 1996, operating expenses for the
current period were 29.8% higher.  The net loss from  continuing  operations for
the  three  months  ended  March  31,  1997,  decreased  by  66.1%,   generally,
attributable to Investment Gains and Other revenue.

The Company's present business operations do not generate sufficient revenues to
cover its  operating  expenses.  The Company,  through a  subsidiary  named Wall
Street Investment Corp., is attempting to start a financial  consulting company.
Whether  Wall Street  Investment  Corp.  will prove to be viable and a source of
revenue is  unknown.  For the three  months  ended March 31,  1997,  Wall Street
Investment Corp. contributed $2,500 in revenue to the Company's operations.

                                        7

<PAGE>



                           PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS (ITEM 103)

                  On September 29, 1995,  various  individuals filed suit in the
                  United  States  District  Court for the  District  of Nebraska
                  against  Premier  Capital  Investment   Corporation,   Capital
                  Reserve  Corporation,  Ralph W.  Newton,  Jr.,  Henry W. Hall,
                  Philip A.  Bates,  Donald Yee,  Linda M. Opfer,  and Dennis G.
                  Haley.  The litigation  lawsuit was in regard to the offer and
                  sale of securities of Premier Capital  Investment  Corporation
                  ("PCIC"),  which was  formerly a  subsidiary  of the  Company,
                  during the period of  approximately  1988  through  1992.  The
                  complaint  generally alleged fraud in connection with the sale
                  of  securities  of  PCIC  and  asserted  liability  under  the
                  Racketeering   Influenced   and  Corrupt   Organizations   Act
                  ("RICO"), as well as several common law theories.  The Company
                  vigorously  defended  the suit.  The  plaintiffs  were seeking
                  damages  against all  defendants in an aggregate  amount up to
                  $2,400,000 together with interest, costs, and attorneys' fees.
                  The Company and the other defendants reached a settlement with
                  the  plaintiffs  and the  lawsuit was  dismissed  on April 10,
                  1997.

ITEM 2.           CHANGES IN SECURITIES

                  Not Applicable

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

                  Not Applicable

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  Not Applicable

ITEM 5.           OTHER INFORMATION

                  Not Applicable

<TABLE>
ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K (ITEM 601)
<CAPTION>
                  A)       EXHIBITS
                  
           REGULATION S-B                                                                            CONSECUTIVE
              NUMBER                        EXHIBIT                                                  PAGE NUMBER
                  <S>              <C>                                                                    <C>
                   2                Plan of purchase, sale, reorganization
                                    arrangement, liquidation, succession                                  N/A
                  3(i)              Articles of Incorporation as Amended(1)                               N/A
                  3(ii)             Bylaws as Amended(2)                                                  N/A
                   4                        Instruments defining the rights of security
                                    holders, including indentures                                         N/A
                  10                Settlement Agreement(3)                                               N/A
                  11                Statement re computation of per share earnings(4)                     N/A
                  15                Letter on unaudited financial information(5)                          N/A
                  18                Letter on change in accounting principles                             N/A
                  19                Report furnished to security holders                                  N/A
                  22                Published report regarding matters submitted
                                    to vote of security holders                                           N/A
                  23                Consents of experts and counsel                                       N/A
                  24                Power of Attorney                                                     N/A
                  27                Financial Data Schedule                                                11

</TABLE>
                                        8

<PAGE>



--------------------------------
(1)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 1990.
(2)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Annual  Report  on Form 10- KSB for the  fiscal  year  ended
         December 31, 1994.
(3)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Annual  Report  on Form 10-  KSB/A  Amendment  No. 1 for the
         fiscal  year  ended  December  31,  1996.  (4) See  Part I -  Financial
         Statements. (5) See Part I - Financial Statements.

         B)       REPORTS ON FORM 8-K: NONE

                                        9

<PAGE>


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       CAPITAL RESERVE CORPORATION
                                       (Registrant)

Date:May 14, 1997                      By:/s/Ralph W. Newton, Jr.
                                       Ralph W. Newton, Jr.
                                       Principal Financial and Accounting
                                       Officer and President

33197.10Q

                                       10

<PAGE>
                                   Exhibit 27

                            Financial Data Schedule

<PAGE>